Poor port condition sinks Davao bid to be ASEAN RoRo link

THE Port of Davao in southern Philippines had been considered as one of the links in the ASEAN RoRo (roll on-roll off) shipping network, but it failed to make the cut because of its poor condition, the Japan International Cooperation Agency (JICA) said.

JICA said the Port of Davao or Sasa Wharf plans to build a small roll-on, roll-off terminal but the site is being occupied by illegal settlers. “Since the port infrastructure is deteriorated, rehabilitation deserves a priority,” JICA said.

Sasa Wharf needs sufficient rehabilitation and no alternative port in Davao has been identified to receive international RoRo ship calls for the time being.

“If the seaway is selected, the intercity route between Davao and General Santos must be detoured by 285 kilometers, which is much longer than the intercity road,” JICA added.

Talks of privatization of the Davao port have been ongoing since 2011, when the port reached congestion point.

The Philippine Ports Authority (PPA) plans to privatize Davao port to better serve the growing business community in the area. It targets to increase the port’s capacity to 1.06 million twenty-foot equivalent units (TEUs) from only 700 million TEUs at present.

Also, the port needs to have additional five cranes for efficiency, yet its current condition hampers the expansion of cargo-handling equipment.

The Davao port modernization is estimated to cost P3 billion to P5 billion. Leading port operators International Container Terminal Services Inc. (ICTSI) and Asian Terminals Inc. (ATI) have expressed their intentions to bid. Bidding I widely believed to begin by midyear.

The PPA aid its board had approved the terms of reference for the procurement of developer and evaluation methodology and bid documents. These have been submitted to the National Economic and Development Authority through the Department of Transportation and Communications.

“The feasibility study and implementation plan as well as other deliverables for the proposed public-private partnership in the management, operation and development of the Port of Davao (Sasa), Davao City are 100% complete,” PPA said.

“DOTC is now in the process of procuring the transaction advisor for this project,” it said.

DIPSSCOR agreed to pay PPA 10% of the gross income for handling domestic cargo and 20% of the gross income for handling foreign cargo, whether billed/unbilled or collected/uncollected. Total fees paid by DIPSSCOR to PPA, shown as part of the “Port authorities’ share in gross revenues” account in the consolidated statements of income, amounted to US$2.3 million or P105.5 million in 2010, $3.4 million or P148.3 million in 2011 and $3.3 million or P137.6 million in 2012.